When providing liquidity to a DEX, such as Minswap, users typically have to provide two tokens in equal value. For example, if a user wants to provide liquidity to the $ADA/$LRN liquidity pool, they would need to provide an equal value of both $ADA and $LRN tokens.
If a user only has $ADA tokens and wants to provide liquidity to the $ADA/$LRN pool, they would first need to exchange some of their $ADA tokens for $LRN tokens. This can be done in a single transaction by using Minswap’s swap feature to exchange $ADA for $LRN tokens. Once the user has obtained the desired amount of $LRN tokens, they can then proceed to provide liquidity to the $ADA/$LRN pool.
The “Zap In” feature on Minswap allows users to easily provide liquidity to a pool with just one token instead of having to provide both tokens in a pair.
By using this feature, users can save time and reduce the number of transactions required to participate in a liquidity pool.
Here’s how to use the “Zap In” feature on Minswap:
Step By Step Instructions on How to Zap In Liquidity on Minswap
Total Time: 5 minutes
Navigate to the Zap In feature: On the Minswap dashboard, click on the “Zap In” tab to access the feature.
Choose the liquidity pool
Select the liquidity pool you want to contribute to by clicking on the “Choose Pool” dropdown menu and picking the desired token pair.
Input token amount
Enter the amount of the input token (either ADA or another Cardano native token) you want to use for providing liquidity.
Review pool share
The platform will display your estimated percentage share of the pool based on your contribution. Review this information to understand your stake in the pool.
Approve and provide liquidity
Click the “Zap In” button to initiate the process. A prompt will appear for you to confirm the transaction in your connected wallet.
Confirm the transaction
Review the transaction details in your wallet and approve it. Once the transaction is confirmed on the Cardano blockchain, you will receive LP (Liquidity Provider) tokens, which represent your share in the pool.
By using the “Zap In” feature, you can easily provide liquidity to a pool with just one token, streamlining the process and reducing the number of transactions required. However, be aware of the risks associated with providing liquidity, such as impermanent loss, and carefully consider these factors before participating in a pool.